Goal Formulation

After SWOT analysis, the next step is goal formulation, developing specific goals for the planning period.

Goals are objectives that are specific with respect to magnitude and time.

Most business units pursue a mix of objectives, including profitability, sales growth, market share improvement, risk containment, and innovation.

The business unit sets these objectives and then manages by objectives (MBO). For an MBO system to work, the unit’s objectives must be (1) arranged hierarchically, from most to least important; (2) quantitative whenever possible; (3) realistic; and (4) consistent.

Other important trade-offs include short-term profit versus long-term growth, deep penetration of existing markets versus development of new markets, profit goals versus nonprofit goals, and high growth versus low risk. Each choice calls for a different marketing strategy.